Sharp Tech with Ben Thompson - Apple's Exposure in a Musk War, Alexa: Find 10 Billion Dollars, YouTube’s Rev Share Model, The Next Great Tech Movie

Episode Date: December 1, 2022

Surveying the landscape after a week of Musk tweets and rumors of a Musk-Cook summit, Amazon has a $10 billion Alexa problem, and Ben and Andrew are asked to build a successor to The Social Network.

Hello and welcome to Sharp Tech. I'm Andrew Sharp, and this is a free preview of today's episode. And on the other line, Ben Thompson, Ben, how you doing? I'm doing okay. How are you? I'm doing okay myself. I cannot believe that we've made it to December here. It feels like just yesterday we were launching and now Christmas is right around the corner. A lot of things happening.

And not only that, it's sweater weather. So congratulations on that. Yeah. Where I record the podcast for people who aren't watching the video feeds that we don't release, I don't have heat in this room. So I'm going to be bundled up over the next couple of months here because the space heater I use is too loud. It gets picked up by the podcast. But everyone out there just know that I'm cozy in a nice camel sweater and feeling good.

I'm ready for the holidays here. Excellent. Excellent. Well, I'm happy for you. Okay, well, the holiday that never ends, Elon Musk, a festival of takes that just keeps going and going and going. Dan says this, and everybody, you can email us at email at sharptech.fm. We're going full mailbag today and we'll open with his comment from Dan. He says this whole Musk turning on Apple thing is so predictable but amazing.

The man can't stand anyone saying no to him, and he has a compulsion to pick fights. It was only a matter of time before he realized that monetizing Twitter outside of ads would mean giving Apple a ton of money. And Ben, I read that only because I need to apologize to you for my worst tech take of the past two months. Can you guess what it was? I mean, you bought AirPods? I did not buy AirPods. AirPods is still a good take in my book. But a month ago, I think we got a question about Musk and Apple.

And I was just sort of offhandedly responding and said, you know, Musk could go to war with Apple. But I have no idea if he'd be crazy enough to actually do that. It seems like he's got enough problems on his hands. And you immediately corrected me in the moment. And we're like, if he'll probably go to war with Apple. And looking back, I guess. I can't believe I thought there was any possibility that this wouldn't turn into a feud between Elon Musk and Tim Cook. Do you have any general thoughts on where things stand?

Well, I do have to sort of tweak our emailer a little bit. People, like, we've been dealing with Musk in general for a long time. We've been dealing with Musk's sort of administration of Twitter for over a month now. and people are still like taking him way too literally. Elon Musk put out a tweet saying with a little status thing with a caution signal that says, spoiler, Apple, did you know that Apple takes 30% of the app store? And apparently, I assumed everyone knew this was tongue in cheek, but people seem to include your email or seem to have taken him seriously.

I mean, number one, of course he knows. who would not know that Apple takes 30%, do we someone in his position. But number two, a cursory Google search shows he has complained about Apple taking 30% multiple times well before he purchased Twitter. So just for the record, Elon Musk, whatever else you might say or believe about him,

did know before this week that Apple takes 30% of purchases about Twitter. I mean, I don't know if there's some sort of meta comment here about the fact that, like, you can't navigate Musk if you're taking like everything he says at the most extreme face value sort of possible. It's one of the things that's fun about the current news environment that's surrounding this story. We just have no idea, at least I have no idea what's real and what's not right down

to the feud with Apple. Like there was a story that I read right before we came on to record saying that actually Apple has increased its ad spend over the last couple of months. And Elon may know better, they said it. This is a story on Apple Insider.com. And who knows? Apple hasn't commented publicly on any of this stuff. And to your point, Musk, it's like, you know, proceed at your own risk if you're

going to be taking his tweets seriously. No, it's tough. It's kind of the same thing about everything around this, though, right? Like we talked about the mass sort of psychosis on that Friday night a few weeks ago. It's like Twitter is going down in a matter of. of hours. It's like, well, no, I mean, it's possible Twitter encounters problems, but it's going to be a low degradation, right? But no, I'm saying it's every aspect of it. And that applies just as much to what Elon himself says. It's not trust, but verified. It's distrust. And then like, you're trying to figure out

what's going on. Yeah, exactly. I mean, that Friday night, I was sitting here being like, well, shit. If all these other writers are seriously talking about the end of Twitter, maybe that's really what's going to happen. And lo and behold, 72 hours later, everything looks ridiculous. And it's all been memory hold. Nobody's really even talking about that weird, like, 36 hour interval. Well, that's because they're waiting for the World Cup to take to, oh, wait, shoot, the World Cup's already going to God. I mean, it's honestly one of the most challenging things. I mean, we'll get to the Apple bit in a little bit. But there is a meta point here about not met or the company, but about this whole episode that makes it really, really challenging.

And I just feel very angsty every time I have to write about it. I made the joke in the Daily Update this week. You know, Matt Levine was always grousing that Yon Musk at Bruny's vacations and forcing to work on weekends during the acquisition process, because that's the sort of stuff that Matt Levine covers, the Bloomberg columnist. And now that Musk is in charge and making decisions about products and strategy, I'm like, crap, I understand exactly how you feel. I wrote about Twitter on Monday and then the Apple thing goes down and I'm like, oh, here

I go. I got to write about it again. But to this emailer's point, it's because and to your bad takes point, this confrontation was inevitable for sure. And number two, this is in reality a confrontation that I think a lot of people in tech are without question sharing you on Musk on. like the Apple rules the tech industry with an iron fist. They bully Facebook.

There's been stories of them bullying Twitter in the past. There's been like, you know, like it's, they're the, if you want to reach customers, you have to have a mobile app. If you have a mobile app, you have to go through the app store. If you go through the app store, Apple will exert control. They will extract their bit. They will kill your advertising business. They will do whatever they sort of want to.

It's very interesting. I'm in, you know, we talked about group chats. I have another group chat. You're in like eight different group chats. I don't know how you get anything done given your commitments to WhatsApp. I live on the other side of the world so that the afternoon I have wanted to sleep. I can actually get stuff done. But yes, it is, it is a challenge.

Like, I mean, this group, and there's a lot of folks that are very frustrated about the Apple situation. And this group, I think, skews a little more towards the sort of, left politically and they're all anti-Musk. It's like the conflict is like super, you can just feel it in the chat. It's like, oh, I guess I got a supportive year or which direction am I going to go. But there is an aspect where, I mean, we've talked about Musk. There is a certain Trump-like aspect to it, right? Like just from a dominating, like he's the current thing on Twitter day in and day out.

and it is pretty exhausting. And, you know, and as someone that feels compelled to cover it, which I never felt compelled to cover Trump, thank goodness. Now I'm like, man, I feel bad for all those political journalists, right? But there, but it's also the bit where, you know, one of the things that Trump did was he would just walk in like a bull in the China shop and he would upset a lot of preexisting assumptions.

And sometimes those assumptions needed to be upset, right? Like, I think the China relationship is a great example. Like, like, there was a set way of, viewing the China relationship that started probably to go back to the Clinton administration. That was pretty continuous and amongst the foreign policy establishment. And Trump just went in and upset the apple cart. Now, the problem with people who upset the apple cart is they are often not very good people at putting the apples back in the car. Right.

Like the bowl does not reconstruct the China. And so I think that's what it feels like right now. Like Musk is how many employees should a tech company have? Bole to China shop, right? Like, you know, is Apple being in control and exerting it rarely directly, but definitely indirectly? You know, like there's, if you talk to any company or anyone that's dealt with Apple, there's tons and tons of stories of updates being held up. And Apple insisting on changes, XYZ. Spotify's been a lot more vocal recently about some of their challenges with Facebook.

You know, we've heard similar things from Netflix and in Amazon. And like, these aren't small companies. You can imagine as a small developer, it can be even worse. And that's why I felt I had to write about this because number one, it was clearly coming. But number two, it's it's another example of where Musk's leadership of Twitter, however it turns out, is likely to have impacts that do extend beyond Twitter, which from a business perspective just isn't that important of a company, right? But from a agenda setting and precedent perspective is definitely a huge deal. It's so much more important than Spotify or Netflix or even meta recently. Like the impact culturally of Twitter, it's at the center of our media.

It's at the center of our politics. I mean, everybody who's in politics is on Twitter all day long. And so Musk picking fights with whoever's on the other side of his tweets is going to get a lot more attention. And it's a point you've hit a bunch in your writing on strategic. so I'm glad you mentioned it here. Like, this isn't pure rubbernecking because you can look on paper and be like, well, Twitter's sort of a failing company that doesn't really have a huge user base anyways. Right.

It's much ado about nothing. There definitely is a lot of rubbernecking, to be clear. Well, no, there's a lot of rubbernecking. But at the same time, some of this stuff could trickle out to the rest of the industry in some pretty meaningful ways. And it just, like, Musk is going to get a lot more attention than Daniel. Eck tweeting about Apple. You know, no shots at Daniel Eck, but like, Musk is sort of public enemy number one, and yet people can't look away, back to the rubbernecking issue.

And when you look back at like what he actually said about Apple, I know it's true that he didn't just learn that there's a 30% tax on in-app purchases. A lot of people don't know that. Right. And so if you're following along as an outsider, all of my nore. me friends. They don't know what Apple did with their privacy policies and the way they've decimated, you know, the ad market over the last 12 months. They don't know how things work on the back end with these update approvals and how kind of arbitrary the process can be and how abusive the policies

can be. Like, all of that is new information to 97% of people out there. And, If Musk is going to bring that to the forefront, it's going to make things pretty complicated for Apple. Yeah, that was honestly kind of mind-blowing to me on the day that he tweeted that. I had a couple different folks reach out to me and ask, is that true? Does Apple take 30%? Right? Which at first, initially, it's like, oh, my, like, how can you not know that? I've been writing about this literally since, like, Schenectery started.

But at the other end, I said, oh, yeah, like, why would anyone know that? But then number two, Apple bans developers from telling users about this. Like this was a brouhaha with meta before where they wanted to put like a receipt or something of your purchase that says, you know, X, Y, Z and how much goes to Apple. And that's a reason Apple banned that particular update from the store. They do not. And which, I don't know, it's always sketchy to sort of like ascribe guilt based on like what someone does or doesn't do. but it is kind of like it's a tempting place to go in this case

which is like, why Apple? Why don't you want developers to tell their customers that? Can you tell me more? All right. And that's the end of the free preview. If you'd like to subscribe and receive every episode of this show, you can do so by subscribing to Stratecary Plus.

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